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In the event that said Lessee does not extract from said premises said minimum amotonts:!bcv!specified Burin_
<br /> each lease year of the term of this lease,it is nevert eless understood that the above sums of mercy are royalties
<br /> for the years stated,and are due and payable to the Lessor whether minerals are mined or not during such year,
<br /> but that such minimum advance royalty will be credited upon the first royalties due as hereinafter provided for
<br /> minerals actually produced from said premises and sold or milled during the year for which such minimum royalty
<br /> was paid.
<br /> 2. Production Royalty—Lessor hereby reserves and Lessee agrees to pay to Lessor as royalty the following:
<br /> (a-1) :ftx
<br /> 50f, per ton or 67.5C per cubic yard
<br /> (a-2) For non-fissionable materialsHii
<br /> — a cc> Ytzstarf
<br /> _ �G[ �Y.St]i6C-A74?:�Si'334�i S�=daS'G2S3�
<br /> +1ioiXr
<br /> (b) 0"5. t�ttae
<br /> c Within sixty days prior to the termination of each and every rye-year period for so long as this
<br /> lease remains in effect, the State Board of Land Commissioners may reappraise the property herein
<br /> leased and fix and determine the rate of production royalty to be paid during each year of the succeeding
<br /> five-year period. Failure to comply wit4 any new royalty rate set by the Board may subject this lease to
<br /> cancellation by thirty-day written notice by the Ecard.
<br /> If reauested by Lessor,Lessee is to furnish tntoof of price received for all minerals sold.Such royalty is due and
<br /> payable on or before the twenty-fifth(25th)day of each calendar month during the term of this lease for minerals
<br /> mined,removed,and sold by Lessee during the preceding calendar month.
<br /> Royalty payments shall apply to payment received by the Lessee on any mineral so sold.The minerals reined
<br /> from the leased premises may be milled it.a custom or commercial plant or mill owned and operated by Lessee.
<br /> They may not be mixed or commingied with ores from other properties until they have been crushed and sampled
<br /> by the mill for the purpose of determining the hereinabove designated minerals and other minerals contained in
<br /> the crude ore that may be salvaged by trilling of same.The resulting samples are to be assayed at the laboratory
<br /> used by the mill where ore is milled and Lessor may demand an assay certificate showing the contents of each
<br /> delivery to mill. If requested by the Lessor,the mill is to reserve a pulp of each composite sample for testing,
<br /> provided,however,said mill will not be obliged to keep pulp for a period of more than ninety(90)days.In the
<br /> event of a dispute as to analysis,the pulp prepared from each composite sample is to be referred to an umpire
<br /> acceptable to Lessor and Lessee and the determination of the umpire will be binding upon both parties.The net
<br /> weight of the crude ore on a dry-,weight basis will be determined at the scales at the mill.Lessor will have the right
<br /> to check the weights as often as it deems advisable. Lessee will' furnish Lessor with duplicate scale weig'nt
<br /> certificates.Lessee agrees to,and will be heid accountable to see that the foregoing provisions are carried out by
<br /> such mill or mills as receive minerals produced frorn the premises herein demised.
<br /> The Lessee has the right to mine,raise,carry,and transport ores from the lands hereby leased through other lands
<br /> now or hereafter owned or leased by the Lessee,and the right to raise,carry,and transport ores mined by the
<br /> Lessee from other lands owned or leased by the Lessee over or through the lands covered by this lease;provided,
<br /> that the ores mined from other lands are in no event..fixed with ore mined frorn these leased premises,except as
<br /> provided above.
<br /> 3. Overriding Royalty Limitations — It is agreed that this lease or any subsequent assignment hereof may not be
<br /> burdened with overriding royalties the aggregate of which exceeds 2% Lessor must be notified
<br /> of all overriding royalties accruing to this lease.Violation of the above may subject this lease to cancellation by
<br /> Lessor.
<br /> 4. Weights -- It is agreed that all minerals mined and taken from said premises are to be weighed and the weight
<br /> thereo is to be entered in due form in weight records kept for such purposes by Lessee.
<br /> 5. Reports—After operations are begun.it is agreed that on or before the 25th day of each and every month during
<br /> the term of this lease the Lessee wiz make a sworn report on forms furnished by Lessor,in which the exact
<br /> amount in weight of all minerals mined and removed from said premises and sold during the preceding calendar
<br /> month are to Be entered and accompanied by full payment for all royalty due for the month.Further,Lessee
<br /> must furnish ',annually a reap or blueprint of survey of all workings, with location of same tied to a corner
<br /> established by United States surveys of some land subdivision,certified to by a licensed engineer or surveyor.
<br /> 6. In ection — It is agreed that during all proper hours and at all times during the continuance of this lease the
<br /> �ssor or its duly authorized agent or agents,is authorized to check scales as to their accuracy,to go through any
<br /> of the siopes, entries,shafts,openings,or:workings on said premises,and to examine,inspect,survey and take
<br /> measurements of the same and to examine and:Hake extracts of copies of all books and weight sheets and records
<br /> which show in any etay the mineral output of the leased premises,and that all conveniences necessary for said
<br /> inspection,survey;or examination are to be furnished to the Lessor.
<br /> 7. dining Methods — Failure to comply with anv of the provisions of this paragraph may subject this lease to
<br /> caneenaiiISn.
<br /> In,the underground and open pit workings,all shafts,inclir.es,and tunnels must be well timbered(when good
<br /> mning requires timbering)and all parts of workings,where minerals are riot exhausted,will be kept free trom
<br /> water and waste materials.The undeiground and open pit workings are to be protected against fire,floods,creeps,
<br /> and squeezes.If such events do occur,they must be checked in a manner which is in keeping with ggood methods
<br /> mim
<br /> ing.ming.Such methods of mining MUST he used as will insure the extraction of the greatest pos-`:ple amounts of
<br /> minerals consistent with prevailing good raining practice.
<br /> Lessee agrees to slope the sides of all surface nits or excavations to a ratio of not more than one foot(1')vertical
<br /> for each two feet(2')of horizontal distance.Such sloping is to become a normal part of the operation.Whenever
<br /> practicable, all pits or excavations are to be shaped to drain, and in no case may the pits or excavations be
<br /> allowed to become a hazard to persons or livestock.Al!material minted and not removed from the premises will
<br /> be used to fill the pits so that at the expiration,surrender,or termination of this lease the land will,as nearly as
<br /> practicabie,approximate its original configuration,with a minimum of permanent damage to the surface.
<br /> Uoon request from the Board Lessee further agr-es to subunit plans and maps of proposed mining programs in
<br /> advance,so that tme board may e t v aware of me eronosea operations.
<br /> 8. Rights-of•way—It is agreed that the Lessor reseries the right to grant rights-of-way ever said premises for public
<br /> roads.railroads,power,telegraph,telephone,ditch,and canal lines,but such grants are to be subject to the rights
<br /> of the Lessee.
<br /> 9. Notices—It is agreed that any notice required or permitted to be given to the Lessee under the provisions of this
<br /> Ie:sc irs to be sent by certified mail to the address set forth at the beginning of t'tis lease or to such other address
<br /> as Lessee may indicate in writing to Lessor and such service by mail will be deemed Sufficient and in full com-
<br /> oliance with the terms of this lease.Notice to Lessor is to be given in like manner,addressed to State Board of
<br /> Land Commissioners,Denver,Colorado.
<br /> —2—
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